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France: Tax-Efficient Sectors

Young, Innovating Enterprises

This page was last updated on 15 Nov 2018.

Young innovating enterprises with significant R & D are defined as follows:

  • less than eight years old, fewer than 250 employees, turnover below €50m.
  • Direct R & D expenses should be at least 15% of total expenses (net of outsourced R & D).
  • 75% of the capital should be owned by individuals (even indirectly) or by risk-capital companies.

No taxes will be levied for first three years, and there will be a 50% exemption for years four and five. However, financial income is taxable.

Municipalities may exempt new buildings from property tax and professional tax owned by such enterprises for a period of seven years. The EU does not allow such advantages to exceed a ceiling of €100,000 per year.
Normally, the holder of shares in companies pays capital gains tax if the sales value exceeds €15,000. However, for shares in such companies, there will be no capital gains tax if the investor owns less than 25% of the company and if he sells them after having held them for three years.



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